Punjab National Bank (PNB) may drag cash-starved Jet Airways to National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code (IBC) so as to recover its pending dues, TV news channel ET Now reported citing unidentified sources. This being a case, the public sector bank may become the first among the lenders to seek insolvency resolution process in the case, ever since the airline grounded on April 17 this year. PNB may approach the NCLT within 24 to 48 hours, the sources also told the TV channel. Even the legal paperwork for moving the Tribunal is ready with the Bank, the report added. However, PNB may wait till the meeting with other lenders concludes to move NCLT, the report added. The Bank may move NCLT before airline’s operational creditor’s case is heard, it added.
The Bank is the second largest lender to Jet Airways with an exposure of over Rs 1,700 crore. No other solution has been left with the PNB but to declare insolvency and liquidate Jet Airways’ assets, Dhiraj Mathur, aviation expert, told ET Now. The lenders should have done this before, he added. The NCLT seems to be the only option left as things have been delayed too much and brand value withered away, he added.
According to media reports, the lenders may decide in a meeting today on what could be a possible resolution for Jet Airways including bankruptcy. The shares of Jet Airways were trading at day’s low at 67.20, down 14.45, or 17.70 per cent on NSE at the time of reporting.
A consortium of domestic lenders led by State Bank of India had engaged SBI Caps for sale of the air carrier. In March this year, the founder Naresh Goyal and wife Anita Goyal stepped down from the airline’s board, complying with the conditions set by potential investors.
Source: Financial Express, June 17, 2019